Tag s | Traditional Publishing

Recently Ann Voss Peterson wrote of her decision to never sign another contract with Harlequin. One major statistic from the article is that she sold 170,000 copies of a book but earned only $20,000.

Multiple clients sent me Peterson’s “Harlequin Fail” article and wanted my opinion. My first thought is that this was the typical “a publisher is ripping me off” fodder. But that would be a simplistic and knee-jerk reaction and unfair to both Peterson and Harlequin.

Yes, Harlequin pays a modest royalty that is less than some publishers. Since when is that news? That has always been their business model because it is the only way to create and maintain an aggressive Direct-to-Consumer and Trade publishing program. Their publishing machine is huge and they are a “for profit” company. For Profit. If they are unprofitable, they go away.

If an author is uncomfortable with the terms, then don’t sign the contract (which is Peterson’s decision going forward). I urge each of you to be careful not to sign a contract and then complain about it later. Unless you were completely hoodwinked you agreed to those terms and should abide by them.

Understand that I am not being critical of this lady’s decision. It is her choice to do so.

But my issue is not with the money (although it is important) it is a larger question. She says she has sold 170,000 books but not made that much money. For the record Peterson has signed with Thomas Mercer which is one of the publishing divisions of Amazon.com…a traditional publisher of sorts, so she may still reach a 100,000 plus audience. So is it all about the money and not about number of readers? If Peterson had chosen to go Indie (solo) and published using the e-book option (like the Kindle Direct Program) and sold 10,000 copies she would make the same amount of money. BUT she would have 160,000 fewer readers! One Hundred and Sixty Thousand.

Consider the stadium where the Arizona Cardinals (NFL) plays seats 63,000. So, in essence this author’s choice could mean walking away from three stadium sized audiences for her stories.

In Peterson’s case it does not appear to be a dollars vs. readers issue because she has signed with another publisher. But for many who are frustrated with their publishing experience it is a good question to ask.

Reaching 170,000 readers is a rare place in this busy industry. And don’t forget that the success of those numbers made her an attractive acquisition for Amazon.com . That is not the case for most writers whose midlist numbers can be depressing. (Read CBA fiction author Eric Wilson who laid out his income while publishing with traditional publishers over a ten year period and has chosen to go a different route with his new books.)

If you wish to wave goodbye to traditional publisher and go Indie (independent) I believe the first question to ask is whether or not you want to start a small business. Just like an entrepreneur. Those authors who are entrepreneurs are ideally suited for the self-publishing route. The understand the energy it takes and pitfalls ahead.

The second question is whether they can sell enough copies to make it all worthwhile. And are also are willing to take responsibility if a book fails.

But not all artists are entrepreneurs. I know of many authors who have gone this route. One sold 1,000 copies of their e-book in a year. Another is averaging about $1,000 in revenue each month…but had to self-publish ten books to reach that threshold. Another has sold about 2,500 e-copies in a few months but the numbers are slowing considerably. Each of these writers can get much more guaranteed income from going the traditional route. Their indie effort is nice income (in this business any income is nice) but it is not a replacement.

P.S. In my opinion it is wrong to compare Amazon’s traditional publishing divisions (like Thomas Mercer) with other publishers. Amazon is so incredibly large and diversified that they could lose money on publishing for five years and still be profitable elsewhere. For a company like Harlequin they are solely vested in publishing (not Zappos shoes, or used books, or electronics). Thus their cost structure is different. Amazon has brilliantly used their economic model and created one that takes advantage of their infrastructure without having to build from scratch.

Is that a defense of traditional publishing? It could be seen that way. But it is more a reminder not to compare oranges with apples. They are not identical.

Your Turn

What is your take on this issue?

Is there a question on this topic you would like to have answered in a future blog?

Ours is a process industry. Good publishing takes time. Unfortunately time is another word for “waiting.” No one really likes to wait for anything. Our instant society (everything from Twitter to a drive-thru burger) is training us to want things to happen faster. Awhile ago I wrote about how long it takes to get published which gave an honest appraisal of the time involved. Below are some of the things for which a writer must learn to wait.

Waiting for the Agent

We try our best to reply to submissions within 6-8 weeks and are relatively good about that. But if your project passes the first review stage and we are now reviewing your entire manuscript remember that reading a full manuscript is much more demanding than reading a few short proposals.

Without question this is the biggest news story in the Christian publishing industry this year, if not the last few years. Most of us have been caught flat-footed. Partly because Thomas Nelson is such a large company. And partly because they were just purchased by an investment group last year. The other surprise is the buyer. HarperCollins has owned Zondervan since 1988 which is a direct competitor to Nelson. They publish some of the same authors. (And by the way, HarperCollins is owned by NewsCorp…whose owner is Rupert Murdoch.)

Back in 2002 when I was still with Bethany House Publishers we were sold to Baker Books. So I’ve seen some of the inside of a publishing sale. There will be some obvious echoes to our experience, but Zondervan and Nelson are very different from Bethany House and Baker.

Today debuts our first guest post. I first met Teddi at the Mt. Hermon Writers Conference while she sat through my Major Morning Track, listening patiently to 8 1/2 hours of lecture over four days. She has recently been asking some penetrating questions about technology and the publishing industry so I invited her to create a post and express those thoughts for your discussion.

Teddi Deppner has published hundreds of websites over the last 15+ years in her work as a professional web designer, marketer and consultant. Recently, she has launched on a quest to map out simple, effective strategies to share with creative people using the Internet and social media for their business. Find her latest projects at www.TeddiDeppner.com.

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Thanks to Steve for the opportunity to share some thoughts with his audience. This post, intended primarily to open a lively discussion, was sparked by an article by Craig Mod about “Post-Artifact Book Publishing”.

Craig’s essay presents the idea that books have traditionally been artifacts: the concrete, physical products of an author. He diagrams the process and participants in the creation, publishing and distribution of this artifact and how things are changing now that books have become more than static artifacts.

Every first-time author is confronted by the reality of “Reserves Against Returns” as part of publishing economics. It is usually a shock and elicits a phone call to their agent crying “What happened to my money?”

Did you realize that book publishing is the only “hard goods” industry where the product sold by the supplier to a vendor can be returned? This does not happen with electronics, clothing, shoes, handbags, cars, tires…you name it. If it is a durable good the vendor who buys it, owns it (which is why there are Outlet Malls – to sell the remaining inventory). Except for books. Somewhere along the line the publishers agreed to allow stores to return unsold inventory for credit. In one sense, publishers are selling their books on consignment. Bargain books are actually resold by the publisher (after getting returns or to reduce overprinted inventory) to a new specialty bargain bookseller or division of a chain (which buys the bargain books non-returnable).

A common myth permeating the industry is that a book is not profitable if the author’s advance does not earn out. I would like to attempt to dispel this myth.

First let’s define the term “Advance.” When a book contract is created between a publisher and an author, the author is usually paid an advance. This is like getting an advance against your allowance when you were a kid. It isn’t an amount that is in addition to any future earnings from the sale of the book. Instead, like that allowance, it is money paid in advance against all future royalties, and it must therefore be covered by royalty revenue (i.e. earned out) before any new royalty earnings are paid.

The more I write on this series the more “boring” it seems to become. Why? Because I’m not revealing anything particularly new or uncovering the secret to getting published. However, the goal has been to talk about things that the traditional can do quite well. And this series ultimately is a journey through the innards of the publishing business.

Napoleon Bonaparte, is supposed to have said, “Un bon croquis vaut mieux qu’un long discours,” translated “A good sketch is better than a long speech.” That has morphed into the modern phrase “A picture is worth a thousand words,” which is a fundamental truth when talking of book covers.

Another cliché states, “don’t judge a book by its cover,” but we do it all the time. We are a visual people and our eyes are drawn to images that capture our imagination. In my opinion, the title and the cover vie for preeminence as the most important part of the presentation of a book to a potential reader.

I need to clarify what I’m attempting to do with this series of posts. I am not digging deeper trenches and pouring the dirt over a head that is already buried in the sand. Some think I’m defending a dying industry and failing to see the changes around it. This series is merely an attempt to remind us what traditional publishers do well. Their critics are jettisoning all of traditional publishing as antiquated. But I posit that there is good to be found in the things that brought publishing to this place.